New Jersey casino rule changes favor casinos

27 April 2011

By John Robison

Without much fanfare, New Jersey recently made two rule changes that heavily favor the casinos.

The first change deals with the player-funded part of a progressive jackpot. Every progressive jackpot has two components. One component is the base jackpot amount, also known as the reset amount. This part of the jackpot is paid from the casino's bank.

Consider this: If someone hit the jackpot on the very first spin after the machine was placed on the casino floor, the casino would have to pay the jackpot. The money has to come from the casino's bank.

The second component of a progressive jackpot is the player-funded amount. This amount comes from the rake that the machine takes from each bet made on the machine. For example, I once played a dollar machine, three coins at a time. On each spin, the progressive jackpot increased by 3 cents, a 1 percent rake.

The long-term payback on the machine using the reset amount for the jackpot might have been, say, 95 percent. But because 1 percent of each wager was added to the progressive jackpot, this really was a 96 percent long-term payback machine.

So, part of a progressive jackpot is money won from the casino, and part is money won from other players. Under the old rules, when a casino wanted to shut down one of these progressive machines, it posted a notice that it intended to shut down the machine in 30 days. If someone hit the jackpot before the 30 days were up, the casino would immediately shut down the machine. If no one hit the jackpot, the casino had to move the player-funded part of the progressive to another progressive machine.

Under the new rules, after 30 days the casino can just shut down the machine and keep the player-funded portion of the progressive jackpot.

Regulators say that this change will allow casinos to more quickly replace under-performing machines. I say that this is the players' money and it should stay with the players. I don't see having to move the accrued portion of the jackpot to another machine to be a burden.

In another player-hostile change, the maximum (or is it really minimum?) odds on a jackpot have been changed. It used to be that a jackpot could be no less likely than 50,000,000 to 1. Now it can be 100,000,000 to 1. If a machine is played 6 spins per minute, 24 hours a day, 7 days a week, this jackpot will hit on the average once every 32 years.